Wrong products at the wrong time 2 manufacturing

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wrong products at the wrong time. 2 Manufacturing resource planning (MRP II) Manufacturing resource systems (MRP II systems) are an extension of MRP I, and an MRP I production scheduling system is a central feature of MRP II.
74 MRP II systems extend MRP I systems by adding other planning processes, such as: •  financial requirements planning •  labour scheduling •  equipment utilisation scheduling. MRP II has been defined as ‘a game plan for planning and monitoring all the resources of a manufacturing company: manufacturing, marketing, finance and engineering’ (Wight). The advantage of MRP II over MRP I is that by integrating these additional planning activities, planning throughout the organisation is co-ordinated. 3 Optimised production technology (OPT) OPT computer systems were developed in the 1980s by Eli Goldratt. The OPT approach is based on his Theory of Constraints. The Theory of Constraints is that production output is optimised by focusing on the constraints that restrict production activity. The capacity of a production system is limited (constrained) by one or more bottleneck in the system Concepts in OPT It is useful to understand some of the main concepts in OPT. 1  A bottleneck or key constraint limits production capacity for the entire production system. 2  Losing time in a bottleneck activity means time lost – and output lost – for the entire production system. 3  However, saving time in a non-bottleneck activity is a wasted effort, because it has no effect on output. 4  There is no reason to produce items faster than a bottleneck activity can use it. Producing items at a faster rate than they can be used simply means that inventories will increase. 5  Inventories are wasteful and expensive. They add no value. 6  The process batch sizes should be variable, to optimise throughput, and should not be a fixed or standard size. 4 Enterprise resource planning (ERP)
75 An ERP system performs similar functions to an MRP II system, but in addition it integrates data from all operations within the organisation. This should improve the co-ordination and integration of planning and control decisions throughout the organisation. An ERP system might provide an integrated database for: •  manufacturing •  purchasing •  finance and accounting •  human resource management •  sales and marketing •  logistics (distribution activities) •  customer services •  strategic reporting. Quality-related costs Quality costs can be classified as: 1  prevention costs 2  appraisal costs Appraisal costs are the costs of checking the quality of work that has been done. Appraisal costs include inspection and testing costs. 3  internal failure costs the cost of production time lost due to failures and defects 4  external failure costs. the costs of carrying out repair work under a guarantee or warranty legal costs, when a customer takes the organisation to court Total Quality Management (TQM) Total Quality Management is a philosophy of quality management with its origins in Japan in the 1950s. CIMA Official Terminology defines Total Quality

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